06.02.2023 11:55 PM
Bitcoin: the week promises to be quiet, but keep an eye on Powell

Bitcoin, unable to climb above $24,000, has rolled back to the support level in the $22,700 area. It can now either recover to last week's highs or break through the current support and pull back to $21,500.

This image is no longer relevant

Let's see what events could be the catalysts for volatility this week.

Small players bought back Bitcoin on the decline

Rising prices above $20,000 in the second week of January led to market FOMO (fear of missing out), especially among small BTC holders.

Data provided by crypto analytics firm Santiment showed that there was a significant surge in BTC addresses holding 0.1 BTC or less after Jan. 13. Since then, 620,000 new BTC addresses have appeared, bringing the total to 39.8 million.

The rise in Bitcoin addresses holding small amounts indicates renewed investor optimism in 2023. It was very limited and slowed significantly after the FTX collapse in November 2022, but the rate of new address creation increased in 2023.

The recent surge is the highest since November 2022, when BTC fell to its cycle low of about $16,000. The price decline prompted small traders to buy up BTC at a lower price.

The current surge is due to a growing bullish sentiment in the market, where apart from Bitcoin, several altcoins have also recorded multi-month highs, while the overall cryptocurrency market is up more than 30%.

February may be less optimistic

After a busy first week in February, market analysts cautioned that this year's recovery in cryptocurrencies and stocks could be replaced by a bearish pullback this month. They attributed the potential coming downtrend to the scale of interest rate hikes by the Federal Reserve.

The price of the major cryptocurrency is still heavily influenced by macroeconomic conditions in the U.S. Initially, the price of BTC rose due to the Fed's decision to raise the benchmark interest rate by 25 basis points and Fed Chairman Jerome Powell's dovish comments.

However, Friday's U.S. jobs data triggered a pullback. According to the latest data from the U.S. Bureau of Labor Statistics, the U.S. economy saw a sensational gain of 517,000 new jobs last month. This was seen by the market as an indication that the Fed is likely to keep interest rates high for longer. Against this backdrop, the dollar index regained most of its January losses.

What Bitcoin traders to watch out for this week

This week's news backdrop is expected to be relatively quiet. The most important event could be on Tuesday, when Powell delivers another speech.

Investors will be listening to see if Powell supports the Fed's hawkish monetary policy with new statements after strong U.S. labor market data or repeats his dovish statements from the FOMC press conference.

The latter seems unlikely, however, as a persistently robust labor market will undoubtedly expand the central bank's future monetary policy discretion.

Presumably, the new deciding factor will be the release of U.S. inflation data on February 14. Whether Powell will be tempted to make new comments tomorrow remains to be seen.

The second half of the week will focus on the latest U.S. initial jobless claims data. In addition to the labor market report released Friday, this figure is considered the second most important for assessing the U.S. labor market.

If more US citizens file for unemployment benefits, Friday's report could be revised, and sentiment in the cryptocurrency market could return to bullish thanks to a further drop in DXY.

Finally, you could also pay attention to the University of Michigan's data on U.S. consumer confidence on Friday. If it turns out to be positive, it could also support risk appetite and the crypto market.

Institutional traders are in the minority

Finally, it is worth looking at the situation more globally by looking at a new JPMorgan Chase survey. It shows that 72% of institutional traders "have no plans to trade crypto," while 14% plan to trade cryptocurrencies within five years. Institutional traders also expect "recession risk" to have the biggest impact on markets in 2023.

The survey, conducted in January, provides "insight into predictions for the year ahead," the bank said in a statement. It surveyed 835 institutional traders in 60 global locations, 72% of traders surveyed "have no plans to trade crypto/digital coin," with 14% predicting they're not currently trading but plan to trade within 5 years. 8% are currently trading, and 6% are not currently, but plan to start within 1 year.

Furthermore, institutional traders predicted that cryptocurrencies and digital coins will "have the biggest increases in electronic trading volumes over the next year." In addition, "100% of responding traders predicted they will increase electronic trading activity," JPMorgan noted.

Institutional traders on recession and inflation

The survey also asked institutional traders about their economic outlook.

"Traders predict that 'recession risk' will have the biggest impact on markets in 2023, closely followed by 'inflation' and 'geopolitical conflict,'" JPMorgan explained. At the same time, 44% of traders predict inflation will decrease.

While most institutional traders surveyed by JPMorgan have no plans to invest in crypto, several other surveys show stronger institutional interest in this asset class.

A survey by asset management firm Devere Group found that 82% of millionaires asked their financial advisors about adding cryptocurrencies, including Bitcoin, to their portfolios.

A different survey by Nickel Digital Asset Management found that institutional investors expect "a strong year ahead for Bitcoin," with 65% agreeing that BTC could reach $100,000.

Last month, global investment bank Goldman Sachs ranked Bitcoin the best-performing asset this year.

Ekaterina Kiseleva,
Analytical expert of InstaForex
© 2007-2023
Euro vs US Dollar
Select timeframe
Start trade
Start trade
下载MetaTrader 4并开始您的第一笔交易
  • Grand Choice
    Contest by
    InstaForex always strives to help you
    fulfill your biggest dreams.
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
  • 30% Bonus
    Receive a 30% bonus every time you top up your account

Recommended Stories

Bitcoin analysis for March 29th, 2023.

Bitcoin is trading around $28,300. Short-term trend is neutral as price is mostly moving sideways. Price has made no real progress over the last 10 sessions. Price is trading inside

Alexandros Yfantis 14:30 2023-03-29 UTC+2

XRPUSD reaches our next target at $0.57.

In our previous analysis we noted that XRPUSD was in a bullish break out mode and that upside potential was towards $0.57 and the September 2022 high. Price today reached

Alexandros Yfantis 14:25 2023-03-29 UTC+2

Bitcoin continues to move sideways, but the clouds are gathering: what to expect in the near term?

The previous bullish week ended and left the cryptocurrency market in a state of increased volatility. The market has been consolidating and moving sideways for the fifth day to stabilize

Artem Petrenko 11:16 2023-03-29 UTC+2

BTC and ETH heading to new highs

Bitcoin remains firm near the lower limit of the sideways channel at $26,700, following the news about Binance's troubles in the United States. As a reminder, the US Commodity Futures

Jakub Novak 09:13 2023-03-29 UTC+2

Technical Analysis of ETH/USD for March 29, 2023

Crypto Industry News: Lawmakers in Europe are working hard on regulations that will apply to the cryptocurrency market. However, it is not known when and what will be the final

Sebastian Seliga 08:45 2023-03-29 UTC+2

Technical Analysis of BTC/USD for March 29, 2023

Crypto Industry News: MicroStrategy acquired another 6,455 BTC worth approximately $150 million. The founder and head of the company, Michael Saylor, announced the next step of the company

Sebastian Seliga 08:45 2023-03-29 UTC+2

BTC update for March 29,.2023 - Potential for the upside rotation

Technical analysis: BTC/USD has been trading upside as I expected but I see potential for the further rally towards upper extreme of the trading range. Due to the rejection

Petar Jacimovic 07:59 2023-03-29 UTC+2

Elliott wave analysis of Litecoin for March 29, 2023

Litecoin has most likely completed a small wave ii correction at 85.68 and is headed higher towards 105.67 and above here will be open for a rally towards 131.05

Torben Melsted 07:45 2023-03-29 UTC+2

XRPUSD potential for major reversal.

XRPUSD is trading around $0.50 having broken the recent higher. Price is in a short-term bullish trend making higher highs and higher lows. Price recently broke above the horizontal resistance

Alexandros Yfantis 19:06 2023-03-28 UTC+2

Ethereum: range pattern underway

ETH/USD is moving sideways in the short term as BTC/USD has been also trading flat lately. Technically, the altcoin signaled exhausted sellers in the short term and now is fighting

Ralph Shedler 16:38 2023-03-28 UTC+2
提出您的问题,用 在线帮助.